Larry Bellehumeur

Lower Oil Price Is a Double-Edged Sword

Thanks, 138602. Natural Gas would likely fall under the same sort of idea, as many of the Horizontal Drilling projects / Deep Wells start to loose their attractiveness with sub-$6 Natural Gas. I do see two key differences, however. Although Natural Gas can be transported in LNG form, it tends to be more of a "local" fuel and one that is only affected by local production. The other key difference is that there seems to be a lot of of production coming online already that will not be halted, especially in the Montney/Barnett Shale areas. Natural Gas should find a bottom soon, as the Inventories will be starting to draw down for Home Heating more. I suspect that it will return to $7-$8 before the end of the winter.

As for Kinder Morgan, I think that most Pipeline companies are a good play here. I don't follow that one as closely enough to give an Intelligent opinion (and have no position in it). I like TransCanada (TRP), which I have a considerable position in, as it offers not only exposure to the Pipeline space, but also to the Power Generation space. Their acquisition of the Ravenwood facility that powers much of New York City was a good entry point for their stock. I also like Enbridge (ENB, no current posiiton), as it has some good exposure to the Increase in Oil coming out of the Oil Sands down to Chicago with their Alberta Clipper line.

Hope this helps...
Larry